Zynga is giving another carrot to investors. The company is kicking off a $200 million share repurchasing program. It’s the first time Zynga has ever done this.
The news comes on the heels of fresh cost-cutting with layoffs for 5 percent of the company’s workforce and potential closures for international offices in the U.K. and Japan. At the same time, the company just unveiled what could be a big new revenue stream in real-money gaming abroad. The company said it’s partnering with bwin, a real-money gaming operator, to bring real money casino and poker games to the U.K.
The share buyback program was buried in Zynga’s third quarter earnings announcement today. At the current after-hours price of around $2.47, such a program would cover about 10 percent of the company’s outstanding 760 million shares.
The company said it saw revenue of $317 million, which was slightly above the lower range of $300 million to $305 million the company said it would see earlier this month. Bookings came in at $256 million, up 11 percent year-over-year. The company saw a loss of 7 cents per share, and its non-GAAP earnings, which exclude one-off share based compensation costs, were 0 cents per share.
On the casino news and the share buybacks, Zynga’s shares have climbed 16.5 percent in after-hours trading to $2.47. However, the thing to keep in mind is that share buybacks and layoffs may be short-term moves that only boost the stock price in the near future. Zynga needs to prove success in mobile and casino gaming, third-party game publishing and in diversifying off Facebook onto its own destination site to boost the share price in the long-term.
Zynga was founded in July 2007 by Mark Pincus and is named for his late American Bulldog, Zinga. Loyal and spirited, Zinga’s name is a nod to a legendary African warrior queen. The early supporting founding team included Eric Schiermeyer, Michael Luxton, Justin Waldron, Kyle Stewart, Scott Dale, John Doerr, Steve Schoettler, Kevin Hagan, and Andrew Trader. Zynga’s mission is connecting the world through games. Everyday millions of people interact with their friends and express their unique personalities through our...